Lenders consider auctioning some assets of grounded Kingfisher Air
Mumbai, November 21
Lenders who are owed more than $1 billion by grounded carrier Kingfisher Airlines Ltd are putting up for sale some of its assets including cars and forklifts.
An auction notice appeared today on the website of the trustee company representing the creditors.
Kingfisher, founded by liquor baron Vijay Mallya and once India’s second-biggest airline, stopped flying three years ago as it ran out of cash. It owes money to mostly state-run banks and suppliers. As of end-January 2014, it owed INR 69.63 billion to its banks, who are assessing interest of 15.5 per cent a year on the debt.
On December 7, the banks will sell moveable pledged assets through an auction over the internet.
The reserve price for assets going on sale has been set at INR 6.5 million, meaning at most the auction will let the lenders recover just a fraction of what they are owed. Banks earlier this year took over $15 million worth of airline property after a two-year legal battle.